Cuba starts monetary overhaul amid Covid-19 pandemic

Havana, Jan 2 : Cuba has introduced a monetary overhaul which will eliminate the dual currency system in place on the island nation since 1994, in hopes of improving the country’s economic performance amid the Covid-19 pandemic and the tightening of US sanctions.
The reform, which came into effect on Friday, will also increase salaries, pensions and social security payments, while transforming the pricing structure completely, reports Xinhua news agency.
The country’s planned economy has been operating with the Cuban peso (CUP) and the Convertible peso (CUC), pegged to the US dollar at par and worth 24 times as much as the CUP.
However, the CUC has had different exchange rates for the public, joint ventures and state-owned enterprises over the past three decades, which has created distortions in the economic system, according to the island’s authorities.
With the new measures in place, $1 will equal 24 CUP, and the CUC will be out of circulation by the end of June.
Nationwide, automatic teller machines are no longer dispensing CUC notes as grocery stores, shopping centres and state-operated businesses are giving changes only in Cuban pesos.